Disturbances in motivation are major determinants of poor functional outcome in a large number of Veterans with schizophrenia (SCZ) and bipolar disorder (BPD). Motivation is defined as the orienting and energizing impact of prospective rewards on cognition and behavior. Despite their clear public health significance, available treatments for motivational disturbances in these serious mental illnesses (SMIs) are minimally effective. To make progress in treatment development, a much better understanding of how different sub- components of motivation contribute to functional impairment in these disorders is needed. In a recently completed Merit award, we launched a translational affective neuroscience research program on motivation in SCZ. Using behavioral and electrophysiological paradigms, we found that SCZ patients showed intact immediate responses to rewards, but a diminished ability to use reward information to adaptively guide behavior (e.g., decision making, cognitive control). For this renewal, we propose to extend this translational research program in three key ways. First, we will examine four sub-components from an affective neuroscience model of motivation that are critical for translating information about rewards into adaptive community functioning. These components and their key associated brain regions are: (a) Reward Receipt (ventral striatum), the immediate response to rewards, (b) Reward anticipation (ventral striatum & orbitofrontal cortex), which refers to responsivity to reward predicting cues, (c) Effort valuation (ventral striatum & dorsal anterior cingulate cortex), the computation of effort costs relative to increasing reward benefits, and (d) more complex Goal-directed action selection, which involves reciprocal capacities to energize higher level cognitive processes in response to rewards (ventral striatum) and to effectively regulate these responses (dorsolateral prefrontal cortex) to obtain valued outcomes. Second, we will extend our methodology to include behavioral plus fMRI tasks, enabling us to more directly ?dig down? into the neural correlates of motivational disturbances. Third, we will expand beyond SCZ to also examine BPD, another form of SMI with an opposing pattern of motivation: whereas SCZ is associated with hypo-reactivity in certain aspects of reward processing, BPD is associated with hyper-reactivity to rewards ? even in stabilized patients who are not in an acute mood episode. In this 4-year study, we will recruit stabilized outpatient Veterans with SCZ (n = 60) or BPD (n = 60) who are not in a mood episode, and matched healthy controls (n = 60). Participants will complete validated fMRI motivation tasks and corresponding behavioral motivation tasks, as well as clinical assessments of community functioning. fMRI activation and connectivity analyses focus on a priori defined regions of interest. Hypotheses are based on our preliminary studies and available data/theoretical models of motivation in SCZ and BPD. Results will help specify brain-based reward-processing impairments that contribute to motivational disturbances, and guide both clinical and preclinical studies of new treatments.